As Britons struggle with their biggest squeeze on living standards at a time of austerity, the coalition government is planning drastic spending cuts to the most vulnerable public services while claiming that “we are all in this together”.
However, if the cuts are going to be fair, then we might expect they would affect everyone in the society equally.
So why is it the poorest in Britain who are bearing the brunt of spending cuts and it is the richest who are getting more affluent every single day?
A closer look at Britain’s economy and how it is regulated by means of taxing system, particularly through “tax avoidance” and “tax evasion” could answer this question.
Tax avoidance by definition is generally the legal exploitation of the tax regime to one's own advantage, attempting to reduce the amount of tax that is payable by means that are within the law.
Tax evasion on the other hand is the general term for efforts by individuals, firms, trusts and other entities to evade the payment of taxes by illegal means.
However, both terms seem to work in favor of the rich and hence against the poor in British society.
Earlier in December, Business giants Starbucks, Google and Amazon were found guilty of dodging millions of pounds in tax in Britain. It is estimated that the corporate tax evasion is costing the UK economy something between 45 to 90 billion pounds a year, meaning that it is practically undoing all austerity measures as well as widening the gap between the rich and the poor in the British society.
Earning money through tax evasion by the rich is just part of the story, as many high-profile individuals, including the Duchy of Cornwall and giant corporations such as the BBC squeeze the taxpayer by means of so-called legal tax avoidance.
In December, Britain's HM Revenue and Customs (HMRC) was called on to investigate suspected tax avoidance by the heir to the throne Prince Charles’s £700 million hereditary estate.
Moreover, the British Broadcasting Corporation (BBC) has been accused of complicity in tax avoidance for more than 25,000 of its employees.
The House of Commons Public Accounts Committee (PAC) said discovering the scale of fraud at the BBC was quite shocking, as the corporation could not provide evidence that these individuals are paying the appropriate amount of tax.
So back to our question, is it possible for the British government to say “we are all in this together” while this is the poor who suffer the most, who rescue the greedy rich people by paying huge amount of taxes and who are the most vulnerable to the austerity measures imposed by the government.